Vol 10 (2013) - Issue 5

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The UNCITRAL Model Law Narrative in Australia: A Review of the Cases

Introduction
Australia adopted the UNCITRAL Model Law (with minor variations) by enactment of the Cross-Border Insolvency Act 2008 (Cth) ('CBI Act'). In doing so, Australia joined a growing number of nations that have acknowledged the need for greater international clarity and cooperation in matters of cross-border insolvency.
At its heart, the law of cross-border insolvency represents a tension between two competing ideological approaches: universalism and territorialism. This tension may result in a practical compromise, merging both approaches, rather than the elimination of one in favour of the other. However, as the provision of credit becomes increasingly borderless (if not completely already), and given that pragmatism shuns parochialism in favour of greater cooperation, the Model Law should foreshadow the predominance of universalism over territorialism.
Though determined on facts preceding the United Kingdom’s adoption of the Model Law, the judgment of In re HIH Insurance Ltd ('HIH') was delivered after, and in which Lord Hoffman stated, 'the primary rule of private international law […] is the principle of (modified) universalism, which has been the golden thread running through English cross-border insolvency law since the 18th century.' This statement has been quoted often, and tellingly, Lord Neuberger, who disagreed with Lord Hoffman in HIH has, in his personal capacity, since suggested a greater need for universalism to meet today’s cross-border challenges. This view, stated by Lord Hoffman, and championed by commentators on the Model Law, suggest that universalism, or (modified) universalism, represents an 'end of history' in cross-border insolvency law, but is this really the case and will that be the legal narrative in Australia?
Australia now participates in an expanding body of jurisprudence on the Model Law; its application and contribution to longstanding principles of cross-border insolvency. Australia’s adoption of the Model Law represents a prima facie commitment to universalism. But, courts in the United States and the United Kingdom (both working in a Model Law framework) have, in recent cases, found occasion to expand the notion of territorialism. Time will tell in what manner the Australian experience and identity contributes to this growing area of jurisprudence, but in a nascent jurisdiction where courts often look to foreign decisions for guidance interpreting common provisions, Australian courts and practitioners have an opportunity to make an international contribution to this field of law.